Is Suzlon a turnaround story after FY16

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Suzlon has received orders worth 1 GW in the last 10 days

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Corporate governance issue cited in resignation letter of the independent director.

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If a director of board cites corp governance issue, shouldnā€™t SEBI investigate?

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Hi all,

Any update on Suzlon corporate governance issue?
Looks like a big event for the company, but the stock price hasnā€™t dipped yet. Any guesses why?

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The company seems to have handled their crisis communications as well as could be possible. They did a investors concall where they repeatedly stressed the governance issues were related to best practices around communication and unrelated to operational and financial issues.

Quoting from the transcript: "Well, Iā€™m repeating that. I said, Iā€™m reconfirming to you with no uncertainty, the points what he has put down to the Chairman are related to the process improvement and the transparency. Iā€™m reiterating once again that there is absolutely and absolutely nothing about financial irregularities or non-compliance of any law or any requirements of this. "

Link to transcript: https://www.bseindia.com/xml-data/corpfiling/AttachHis/be1984b7-22b5-4c9d-b096-77da2bcf399c.pdf

They followed that up with a company statement last weekend: "Further to our disclosure dated 8th June 2024 regarding resignation of one of our independent directors, i.e. Mr. Marc Desaedeleer, we wish to inform you that at the request of the Chairman of the Company (i.e. Mr. Vinod Tanti), the Chairman of the Audit Committee (i.e. Mr. Gautam Doshi) has agreed to take up the responsibility of evaluating suggestions on corporate governance practices of the Company. In this regard, the Chairman of the Audit Committee has decided to appoint Khaitan & Co, an eminent law firm in India, to conduct a review. To further aid the process, certain additional advisors may be appointed as required from time to time. "

Link to statement: https://www.bseindia.com/xml-data/corpfiling/AttachHis/88342726-758e-4081-ae6a-dbcfa4e84730.pdf

My interpretation - this situation is certainly messy and something I would have liked to avoid as an investor. However the lack of detail in the resignation letter is also a concern for me. The management team could have also given more specifics on their investors concall. Will look forward to what the review by Khaitan & Co uncovers.

Disclosure: Invested.

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Suzlon Q1 FY25.pdf (5.8 MB)

On Con call,
Question on execution: Sir, can you just elaborate on what exactly are these difficulties that we are facing in execution?

Answer : 1. why we are not able to go up to 8 GW, 9 GW is fundamentally the two or two reasons we can say. One is the availability of land and the pathways. And more importantly, continuous availability of pathways. You might have taken a pathway to take your turbine and everything, but after youā€™ve taken it, then again, there could be issues locally with people to do that. Because please understand that wind projects are scattered by. They are in an open area; they are not in a closed area like what you do solar or you do a fossil fuel-based plant. So, thatā€™s the major concern today everybody is facing in terms of the land and also because most projects got concentrated in Karnataka today. So, therefore there is more pressure there and also the regulations in Karnataka for land acquisition is a very combustion process.

2.Second reason why we are saying execution is in terms of connectivity is one reason where the substations there are timelines to come in, thereā€™s a delay in the substation coming up by a few months. So, therefore that gets delayed.

3.Third is that the BOP capability building, capacity building is still happening in the
country, because no other OEM does end-to-end exceptional Suzlon . And even in our case, only one-third is EPC, the balance two-third is not EPC. That means we are not doing end-to-end. The third-party BOP capacity building is still happening. So, therefore theyā€™re seeing the delays of BOP not in the speed at which is expected.

Q2 : Global peer is looking to sell its India business (Siemens Energy Business). So, will we be looking to acquire?
Siemens Energy to sell Indian wind turbine unit amid profitability push (moneycontrol.com)

Answer: First part of it, are you looking at it? We are looking at it, like everybody looking at it we are looking at it. Are we looking at it to acquire? I donā€™t think so. Letā€™s see that what happens. There is no definitive answer of yes or no for that.

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Suzlon Announces Indiaā€™s Largest Wind Energy Order of 1,166 MW from NTPC Green
Energy Limited, the Renewables Arm of NTPC.

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ā†’ Suzlon Energy partners with Jindal Renewables for 400 MW captive wind power deal.

  • This marks the first wind energy project for the renewable energy division of the Jindal Group
  • Suzlon will supply 127 stateā€ofā€theā€art wind turbine generators (WTGs) with Hybrid Lattice Tubular (HLT) towers, each having a rated capacity of 3.15 MW in the Koppal region in Karnataka.
  • With the new order win, Suzlon Energyā€™s cumulative order book now stands at nearly 5.4 GW.

Source:

Also, Tata Power is on a lookout for a whooping 3GW Wind Energy unit suppliers in the market, and Suzlon is in the race for the bid.

  • This order win will be very crucial for Suzlon.
  • It will establish its credibility and superiority for future orders from various power orgs.